S&P Maintains Stable Outlook on Indonesia's Economy  

Jakarta: Standard & Poor’s Global Ratings (S&P) affirmed Indonesia’s sovereign credit rating as ‘BBB’ for the long term and ‘A-2’ for the short term.

The rating signalling continued international confidence in the country’s economic resilience despite elevated global interest rates, financial market volatility, and fluctuating energy prices.
 
“The investment-grade rating demonstrates our strong economic foundations. The government continues to uphold fiscal discipline, strengthen state revenue sources, improve spending quality, and ensure that financing is managed prudently, efficiently, and sustainably,” Finance Minister Purbaya Yudhi Sadewa said in Jakarta, as quoted by Antara on Tuesday, July 14, 2026.
 
S&P projected Indonesia’s economic growth to remain at around five percent over the next two to three years, with growth expected to reach 5.1 percent in 2026. Purbaya noted that Indonesia’s economy had already grown by 5.6 percent year-on-year (yoy) in the first quarter of 2026, driven by strong domestic demand and rising investment activity.
 
State revenue also showed strong growth, increasing by 21 percent yoy in the first half of 2026, prompted by robust tax administration, improved taxpayer compliance, and better optimization of non-tax state revenue (PNBP), particularly from the natural resources sector. Purbaya added that the government would continue to advance tax administration through digitalization.
 
The agency also highlighted the Indonesian government’s commitment to keeping the state budget deficit below three percent of gross domestic product (GDP), a policy they say has reinforced the country’s fiscal credibility.
 

Structural reforms

In its report, S&P underscored various ongoing structural reforms that have the potential to strengthen Indonesia’s economic growth in the medium term.
 
Responding to the assessment, Purbaya reaffirmed that “the government is committed to implementing all reforms transparently and maintaining consistent policy communication to ensure investor confidence.”
 
S&P also called for the strengthened role of Danantara, citing its potential to improve state asset management, enhance transparency, reduce economic leakage, and support investment financing in strategic sectors.
 
The agency further noted that the Indonesian banking system remains well capitalized, with limited contingent risks to the government.
 
Reflecting on the report, Purbaya emphasized that Indonesia’s fiscal and external challenges were temporary, stating, “the affirmation sends a positive signal to global investors that Indonesia remains a credible, safe, and promising investment destination for the long term.”
 
(Jonathan Sianto)